patients, that stock higher around 1%. >> thank you so much. see you at 5:00. "fast money", looking forward to it. >> "closing bell" starts right now. ♪ ♪ i wish that i had jesse's girl ♪ >> such a great song. welcome to "closing bell" i'm kelley evans. >> and we're up 195 points on the dow but we're not just talking about what's going on with market rally. rick springfield is going to be here at the new york stock exchange to tell us about his new album and his singing and acting career and how it's affected by the explosive growth of streaming music and video. his new album, how will he make money off the album, is it going to be from streaming, sell albums themself or touring? >> i heard he played in a small music store over the weekend, for a group of a few dozen

people just in order to give something back to fans and new album and said his tried to be fundamentally positive, not just complaining about things, trying to get stuff done. >> you've been talking to rick already. >> we go way back. first as bill just mentioned, we have a nice rally on our hands in the meantime. the s&p trying for its best two-day rally since late august. nasdaq trying for its best gain since october. >> and you feel the energy with the springfield playing in the background? move in stocks higher is happening as oil goes lower. crude did rally on the open after that announcement announced by saudi arabia to freeze production levels to january levels. but there were those who wanted to look for a production cut and the agreement is contingent on other oil producers also freezing their production, which is not likely to happen. oil continues lower.

we'll talk about why a cut was taken off the table for now and whether we could see one in the future. >> the good news, it seems like stocks are holding up dispute the move lower in oil. breaking at least again for today. has the market found a bottom or is there another red flag on horizon? we'll talk to mark okada, the guy to talk to, he'll join us coming up. >> always look forward to talking to mark. let's go to bob pisani. >> the s&p is up 80 points since bottoming thursday afternoon. three things, first is oil, even though it is down, 63% of the energy sector is on the upside. anadarko was $35 on thursday. look it's almost $39 right now, a gain of about 11% in two and a half days. take a look at apache, same

situation, big oil production company, and apache was 33 on thursday afternoon now it's $37 and change. that's up about 12%. the other big issue is the european bank debt, concerns about that. better tone overall in the last few days, look at deutsche bank, it's down a little bit but it was $15 back on thursday. it's now $17 and change. they've been talking about buying back bonds. mario draghi was making aggressive statements. there's the ecb component of this. finally there's a whole chinese component. take a look over here. this is a chinese online car retailer, that's up 10% today. there's concerns about china weakness and currently devaluati devaluation, they had record consumer loans in january and big pboc official defended the yuan implying there was not going to be sudden devaluation. you talk a little better china news and ecb and perhaps news on

oil. a lot of talk but all very high level talk. the highs for the day. >> thank you for now. turning to oil after falling today on those oil producing countries, russia and saudi arabia, agreeing to freeze output rather than cutting production. brenda shaffer, global energy center and professor at georgetown university. welcome back. >> thank you. >> do you think their heart was really in it with saudi arabia and other two countries announced this agreement to freeze production? it was contingent on other oil producers doing the same. could you imagine all of them wanting to do that? >> i think it's actually just a genius move on russian and saudis part, a tactical move. all you have to do is chatter and have a meeting and talk. and i think they learned that the three previous times when they had a meeting discussed it, they got lift to the oil price. no matter what by talking about it, they have gained a lot

financially. it creates a momentum andthy don't even really need -- i think this puts the blame on iran and makes it look like russia and saudi arabia are trying to be very productive and to be helpful on the market. and actually it's iran that has to make the cutback, it's a real genius move on their part. >> the oil price is negative on the day and wti crude is 29 or whatever it is now, we should check, 29.10 a barrel and brent at $32. it's not as though we've seen a significantry bound off the lows of the session but this move may have had a couple of hours of real impact. >> i think there was actually the bump was high enough for the first day they each made tens and millions of dollars just after -- i think it was already meaningful in that respect. it also shows they are being cooperative, trying to do something with the market,

retain the leadership role. >> there are those who also say they don't believe that it's -- it's one thing -- it reminds me of talking about the fed. the only confidence they'll sl in these kinds of statements, if they do follow through whole production, steady for example and if they were to cut it further, that would be more significant but how likely is it is that everybody is going to keep production steady? >> well, actually, most of the major producers, russia, saudi arabia, iraq are at all time highs, even like committing to january is a very high level for them. they have very little interest to cut back and open the door for iran with iranian oil hitting the markets. we saw the first deliverlies of iranian oil to europe, this cuts into russian market share to compete with saudi arabia and asian market share. to make a real cut, i think your point is very good. it used to be these kind of statements never impacted the oil market unless we had a tight oil market. it's interesting this liquid oil

market, we're looking for some kind of direction, flying up or flying down. which way is is it going and traders seem to react any type of statements right now. >> bearing in mind that most of them need the money so they keep pumping and don't want their enemies to make money, meaning saudi arabia doesn't want iran to make money right now. with that kind of dynamic underway, do you have a move forward for oil? and if not, how much lower do you think we can go? >> i mean, eventually, there are some producers that the price is getting too low to cover their costs. no one is going to produce oil over time when they are losing price. i think eventually the economic benefits of the lower oil prices have to kick in in certain places. eventually this year we will see a lift because it's getting too close to the production costs in the marginal barrels of oil. >> thank you for joining us. >> thank you. >> let's get to our closing bell

exchange for this tuesday with the dow up 183 points. bill smeed from smeed capital management is with us today. michael robinson from monday morning.com and keith bliss from cuttone and company. we have a rally in stocks as oil moves lower here. is that -- that something trader would hope would happen at some point? >> one day does not make a trend but it is interesting to see. since the beginning of january we've seen both of those classes move almost in lock step, 90% correlation between the movement of the two prices and carried on through february. i think what's more significant in the market today is not just the breakage in the trade but how the small caps are responding. all of the major averages are under pressure but the russell and the dow were the two averages that had the most ground to make up and small cups and russells making the most ground today. we need to see more follow

through on that. we have bullish technical levels we cross over. if we can hold gains and stay here, we can move higher in the short term. however, i will say this, i do still as you have noted, some people have noted, turned a little bearish against my usual behavior in the last couple of weeks. there are some risks out there. credit spreads are too wide. sentiment using vix as a proxy is still too high. we've got to see that come in a little bit and stop seeing the asset flows out of the equity etfs. if we can see those things happen, i'll have more confidence. >> on that trade, welcome, think about you every time people talk about recession risk. your whole point, base beingally, don't underestimate this economy and millennials and they are going to form families and everything is going to be fine. what do you say now in the wake of the last six weeks? >> five to ten year phenomena

take five to ten year to play out. diana had a piece on friday that showed that the supply of available homes for sale is incredibly low and that will get cured and that's going to get cured at the same time that a whole bench more mel lennials that couldn't afford to buy a home before will be able to afford it. from a stock market standpoint, what's been more important, this is a psychological rally coming off a psychological low that challenges the most negative sentiment we've had in the last six or seven years. when you get individual and professional investors as bearish as they were in march of '09, what do people think is the right thing to do? markets bottom when the last seller sold and markets top when the last buyers bought. we might have got to the last seller last thursday or friday. >> michael robinson. what are you thinking right now? are you buying this rally right

now? if so, what? >> i want to make sure we're not having -- we've had a number of false breakouts. quickly on oil, what is really significant is that weeks ago the speculation was that opec would keep the flood gates going to keep u.s. producers out of business. this is an important psychological relief. it looks like the oil producers are starting to get tired and willing to at least talk about cutting out. that psychological barrier has been broken. so that's i think part of what's going on. that's one of the reasons you see i'll down a little but the rally going. the end is near for opec to keep the gates open. in the united states there's a lot to like about this economy. you talk about millennials and car sales, 17.5 million last year, highest in history. we have historically high home sales and home starts.

and consumer confidence is held up pretty well. i do believe that we're just a few weeks from seeing some of the savings we're getting in energy costs on natural gas and gas pump translate into more consumer confidence and increase in spending. i think that will help throughout the economy. i'm still very bullish overall on tech. there's a lot of arguments over there. >> we see you like facebook and apple. what would you buy in this market? >> it's funny. by the way, the housing starts are at really record lows right now but i think he's talking about what's to come is going to move back towards record highs. what we like is ironically what is rallying today for first time in a long time, which are kind of what you would call the old addicted customer base companies and the businesses that should do well as prosperity returns, which people have avoided like the plague. no one wanted to own ebay

because of amazon and no one wanted to own nordstrom and cabela's because of amazon and no one wanted to only disney and netflix because of amazon. what's happening is fangs are not doing a whole lot or they are doing market type activity and the companies they were supposed to anile late are catching a bid. >> the fangs aren't doing it but they are gumming the market right now. i have no idea what that means. what are you watching today to tell you this would be for real? it will tail a while but what are you going to watch? >> we want to see the s&p futures where they close. if they close above 1880 that crossed a very important level and we'll get more buying into this market. >> 1890 now. >> the other thing you need to be careful about. when you get these pretty good rallies inside of what everybody thinks is starting into a bear

market, they can be sharp and severe. you have to watch for diminishing volume as they start to peter out. if you see that, the shorts will come back in and we'll go back down further. i think we're still going to be in a consolidation period until we get more clarity on the economic front and as we get through the earnings period. >> hopefully we'll get that soon. >> thank you, we have to leave it there. appreciate it. >> thanks, guys. >> we've got 45 minutes left in the trading session here. the dow was up 200 plus points a little while ago, now up $184. we'll see what happens in the final few minutes. >> apple announcing a big bond offering as part of the capital return plan. we'll look at how and when and whether it can jump start the broader corporate bond market. >> rick springfield will be with us to talk about how the streaming music explosion is affecting artists like us. he'll join us live coming up momentarily. man 1: [ gasps ]

man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor. man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: should i be worried?

man 1: you are the ceo. it's not just security. it's defense. bae systems. 200 point rally today. here's a look at the big movers, security services company adt being acquired by apollo global management, a $42 a share deal, $7 billion or a 56% premium over its closing price on friday. the deal does include a 40-day go shop period for adt where they can go out and solicit perhaps a better deal. meantime, free port mcmoran,

after it sold a stake in a copper mine, they plan to use the proceeds to help pay down debt. falling commodity prices have hurt free port lately, down 30% in just the past three months. >> speaking of corporate debt, apple announcing a $12 billion corporate bond offering, mike santoli is here with the details. >> it's only been less than three years since apple did the first bond offering in april of 2013 and since then become one of the most important factors in the corporate market, has $55 billion in long term dealt before the deal, that's going to be 67 billion or $68 billion. it locked in relatively low rates this time had to play a little more of a premium above treasury yields because it was such a novelty factor back then and corporate bond spreads have widened out. they have taken the cheap debt and buying back stock at the low

multiple to earnings and promised to return $140 billion in cash to the market by buying back stock. it's already gotten $110 billion that through last quarter. >> call me a crumudgen. isn't there a better use for the funds to borrow rather than buying back your own stock? >> you could definitely quibble with this strategy in terms of plowing more and more funds, when you have $200 billion in your own cash sitting overseas into your own stock. that being said, i've said this for a long time. there's not a single smart thing you can do with $200 billion. i don't think the market will hand you money to go and experiment with. it doesn't need to do that. it's balance sheet engineering and listening to wall street saying in the absence of something else revolutionary to do with this money, we're going to do the thing on paper that

seems to make sense. >> i'm wondering too, every single day there was no primary debt issue and corporate bond markets have struggle as we've been paying attention to the other more ar cane parts of them, even for blue chip companies. how did the bond offering go? >> i think it went relatively well. we've had two-year to 30-year debts, nine different maturities, it was interesting, corporate floating rate debt is in demand. they are giving the market what it wants. i do think when you have a big dominant issue like apple, they can play the market and say people are willing to take this type of paper, let me hand it to them. anywhere from 60 basis points for the two-year to two percentage points, just round numbers, paying a percent and a half or less from two-year debt, under 5% for five-year debt. >> would they have gotten those

terms if they wrnlt apple? >> if they were a similarly rated company with that much cash overseas it would be close. >> thanks, mike. see you later at the top of the hour. >> 40 minutes to go here. keeping an eye on the markets and let's see the dow is up 204 points at the moment. nasdaq is up 2% adding 90. >> mark okada will be back with us to tell us where he's finding opportunities in this -- i'll bet he's finding a lot. >> i suspect that he is. first though, rick springfield is live at the new york stock exchange walking over to the set right now to tell us about his latest album and how the streaming music industry is impacting him and other artists when we come back. >> i want that jacket, by the way. ♪jake reese, "day to feel alive"♪

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welcome back, rally day for markets, the dow up 200 points, the nasdaq is up 90. let's talk for a moment about community health systems. one of the few big decliners after the operator reported loss on revenue, because of a slow few season but those shares are down 23%. >> now as we all know last night was music's biggest night of the year, 58th annual grammy awards, taylor swift took home the night's top award for album of the year. >> joining us now with his take

is music icon and grammy award winner himself, rick springfield. >> who's become a good friend of this program. >> i'm more excited to be here than at the grammys, honestly. >> we have a new album called "rocket science" thanks for joining us. >> glad to. >> tell us about the album. >> it's my 18th studio album and -- >> classic rick springfield. >> but it's got some country influence but not a country record but very rock pop with big choruses and guitars and i'm really excited about it. >> how are you going to make money off of this? >> i'm going to invest here. >> you tell us about your broker. compared to how you used to make money off of albums? off the streaming or is it touring? >> it used to be you toured to support the album. now you put the album out -- >> to support the tour. >> it's really, i like putting new music out because it keeps it fresh for me and like to be able to do new music all the

time. i know artists from the '80s and that say i'm not recording anymore. i love to record. i love to write new music and that keeps me passionate. >> the last time you were here was for the movie you did with meryl streep. my god, that you've got tv -- so much -- >> true detective. >> so many things going on. channelling my inner creep. >> are you finding that you're actually sort of deluged with work because the proliferation of the platteforms in streaming -- >> i'm always doing something, writing if i'm -- i write proes and songs when i'm traveling but really there's a million actors out there and million musicians. i can work full on if i wanted to but i'm really interested in getting into more act and more tv because the writing is so great on a lot of those shows. >> you have to have by better business person now than you used to.

you think about the music personalities today, some of whom are considered moguls before they are considered artists. >> pretty amazing role model now. certainly from the day -- when i came from, you thought maybe you had a three-year career in you were lucky. and so you just blew the money. i blew a lot of the first money i made. and then found a guy who helped me understand to invest and make it grow and that's the most important thing a musician can find. >> have you thought about asking mark zuckerberg for a million dollars? >> i did already. >> you did? >> before kanye. >> he hasn't gotten back to me yet, mark, come on, dude. >> facebook me. >> yeah. >> half a million. you mentioned you didn't watch the grammys? >> i did not because -- it's hard to watch television because i have add and i can't sit still. >> even tv is not quick enough. >> no. >> i do wonder about the

spectacle of whole thing and bill referenced twitter and kanye west is putting out a lot of tweets around the album that are over the top shall we say. do you feel pressure to become part of that? >> no, not at all. that's a whole other game. that's what they want to do, that's fine. i just love music and love writing music and playing music. and i don't try to -- other than what i sing about and write about, i don't try to plit size it any other way than what i say. >> you have tour dates coming up? you're welcome. >> what's that? >> you're welcome. i'm sure we do. we have iheart radio is doing an 80s party with me and tears for fears and culture dlub, the first time -- billy idol. a couple of days at the forum. i'm real excited about that. >> you're lucky you still love to tour. >> i love to tour. i'm passionate about playing live.

i'm passionate about acting. still love this stuff which is why i do. if i didn't get a thrill out of it i wouldn't do it. i love writing and we have a novel out -- and still writing a lot of stuff. >> good for you. >> and investing. >> we'll let you walk around here and get some tips from the traders on the floor. >> are you watching? >> the new album is called "rocket science". >> thank you so much. >> good to see you. >> time for a cnbc news update with sharon epperson. >> the chairman of the senate judiciary committee is not ruling out holding confirmation hearings on president obama's choice to fill a supreme court vacancy. the republican from iowa says he would wait until the nomination is made before making any decision. democratic presidential candidate bernie sanders telling a prayer breakfast in south carolina that if america can build projects in iraq and afghanistan, it can find the money to build the flint water system. his call for a massive inin a

structure rebuild of flint drew a rousing standing ovation at the meeting. emergency crews battling a three alarm fire in an apartment complex in harris county texas. firefighters said fire hydrants an water pressure were causing issues with dousing the flames. the ap reporting that miami heat basketball player chris bosh has resumed taking blood shin thinners to treat a blood clot in his legs. he hopes to resume playing this season. that's the cnbc news update at this hour. >> we wish chris bosh well. absolutely. >> we're heading to the close and 20 minutes left on the trading session. the dow is 205 points. they took our board away and nasdaq, look at that, up 2.1%, gain of 91 points as keith bliss was pointing out, secondary

stock doing pretty well. >> mark okada will tell us about fears about high yield have gone away. and elon musk is just not winging it with his new car line, he wants to know what it will take to get you behind the wheel of a new model x. details of tesla's new hands on push to sell the electric suv coming up later on "thin"the cl bell."

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the dow is up 206 points and nasdaq up 92 here, a gain of 2.14%, this despite a drop in the price of oil. for one day we're seeing a decoupling of two assets classes. >> thank you, yeah, citigroup up almost 4%. over financials up in the range

of 2%. mark is here to chop the hammer on what's going on. welcome to you. talk us through what you're watching in this market? >> encouraging to see signs of financials make strong moves off the lows. this group is hit hard, down 20%. european banks hit almost 30%. the xlf, three things that i see that are very encouraging in the near term to think financials can actually stage a decent balance in the week ahead. a hammer pattern when prices have gone down so severely, they rally close to near their highs despite a meltdown. they are seeing to see die vergence in sri, that's also a positive. if you look in the last day, today, we're breaking this minor down trend from early january. so markets gotten stretched over the last couple of days but over the next three to five months can stage a very oversold rally

that would help the technicals line up with what a lot of fundamentals have been saying. we heard from mayo about balance sheets being stronger than ever. technically i think financials definitely should be overweighted in the near term and that could insides with what yields have also done, just in the last couple of days alone. >> 10-year interest rate drifting up higher. a sign of optimism heading into the close. >> thank you. >> stocks are rallying for a second day running giving rise to the thought that maybe we've seen a bottom at least short term. but what should a skeptical investor be looking for for the long term? joining us, mark okada of highland capital management. >> good to be back. >> you look for distressed asset and value and things like that. i'll bet you're finding more right now? >> absolutely. but we're talking about this little bounce we're seeing here.

i think that's all it is. it is a bounce. last time i was in the show in december we had a bounce and market created a top there. we've got to be careful about days like this we don't get too excited what's going on. >> what's troubling the market now? we've had so many coming through saying the u.s. economy is doing okay, right, job growth is here and retail sales revised higher and housing market seems to be doing okay. what is the problem? >> there's a difference between the stock market, economy, right and the real economy. >> i know. >> but that being said, i think the real economy is slowing. if you look at pmi, ism, the global picture is not as rosy as you would expect it to be given how much fed intervention we've had. now we're talking about negative interest rates in europe and japan and et cetera. that's not good for risk assets at the end of the day. my point around all of this at -- from riseners at home, the wealth effect is driven by what

we've seen with monetary policy. if it starts to give up, which is kind of what's going on here, what's next? what's really happening now is that there's this pivot going on between growth, everything momentum that's been working, those stocks got to 30 times earnings, that's not working any more, you've sign them reverse in january and february. where is that money go? i think some of it goes to sidelines, which probably makes sense and the rest will pivot towards things that are more value driven. >> i want to work on this. you have dealt a lot in the distressed high yield parts of the market, loans and bonds and you name it. there's been a lot of carnage. what are you doing right now? where do you think people should put money to work? >> anything that gets stressed in here gets overshot, you saw the financials last week get hit and they really overshot. that graphic we were just looking at, that's happening in names when they get stressed, something that would normally

trade to 8 or 9% is going to 15. we're stepping in and buying it. on the other hand, some of the highest squault stuff like bank loans trading at 7 and 8%, that's floating rate zured and economy is doing well. we like that. we think that's good value and i think this whole pivot from growth to value will be something that we keep talking about on the show. >> you don't get much more distressed than energy. ready to buy anything there? >> i think the energy sector has some buys in it but the one thing that i think that i've been honest about is that predicting the price of oil from here is really going to be very difficult. because we're in a different dynamic for global growth, you won't buy oil stocks until you think prices have bottomed. >> i like to see them stabilized. we might have put a bottom in last week or week before. if that happens, we stay in this zip code. there will be nice value, especially in the credit side

because some of is that stuff really has been beaten up. again, it's going to be something that i want to wait and see happen before we step in. >> and as much as you and everybody has been saying will depend on the economic data holding in there, mark, thank you so much. >> always good to see you. >> mark okada, thanks. >> we've got 20 minutes to go here ant dow is up 187 points and nasdaq up 87 and finally kick off the week with a month positive tone. >> tesla is taking model x reservation holders on a road trip as they try to convert those $5,000 deposits that were made into big ticket orders. phil lebeau will join us from a test drive event. who will win the republican presidential nomination? we'll hear from the students behind an incredibly accurate college mock convention, mock convention. great college, great place. >> i know what this is about

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taes la is hoping a model x test drive event can convert into actual sales. >> usually works that way. phil lebeau is at one of those

events and joins us now with a bit of a tour. hi, phil. >> reporter: we're heading south on the eden here in chicago and ralph is our driver here in the tesla model x. you flew from florida to have a first crack at driving the model x, right? >> it's my wife's so -- >> she's right back there. >> she gets the back seat. >> reporter: a lot of people ask about the autopilot. show us how it works here. >> it's pretty easy. first thing you want to do, you tap it and put on -- >> no hands, right? >> reporter: you book tells you to use your hands but it handles real easy if you want to change lanes. the sensors, you hit the turn signal, there's a car next to me so the car won't go. as soon as the car gets past the safe zone, there's another one, there we go. it's a little hard to see at home but you're using no hands here. doing the legal limit, the 55, maybe a little bit more. just in case the state police are monitoring our progress

here. >> reporter: that's this been worth the wait? a lot of people are saying they delayed the model x, $5,000 department, you waited over a year and sitting in it for first time. was it worth it? >> from what i see so far yes but we also have an s at home, we're driving it every day anyways. this gives you new perspective, a nice feel to it. it's a little higher. the wife will like it a lot, right? yes, sir. >> you have a question for ralph. >> ralph, buying a car is an emotional event. i was going to ask about buying a tesla, but you own one already, so you're going to come back here to buy this x. are you buying it for the value or because it's just like in your view what would be the coolest car on the road. why a tesla? you could buy any car you want it sounds like. >> it's a combination of both. we did a calculation if we live

to be 85 and drive the whole time and we figure gas is a little higher than what it is now, it's $150,000 of maintenance and fuel that's going to be in our pocket plus it's really fun to drive. it kind of takes off pretty quick right now. >> reporter: doing 90-ish, this one is faster than mine. it's a combination of both. pleasure to drive the car. >> what about the doors? how do you find that experience, you and your wife? >> well, it's -- they are -- it's a spectacular piece of engineering. it would be nice to roll them up right now we could probably take off with those wings. it's cool. it's a time machine this thing. >> well, ralph, you have been one of the furthest to travel to have a model x test drive today. we've been doing it all day long and everybody says the same thing, when do i get mine?

a lot of people are hearing second half of the year. >> they waited a long time. >> sorry it feels a little distracked right now. >> i'm distracted because arthur cashin was just telling me right now -- >> few other people on the floor. >> the imbalance is $300 million to buy. i'm holding to that -- >> that's my story and i'm sticking to it. >> to ring the closing bell of the new york stock exchange. i see what you're talking about there. >> just over there at post six. that event to happen in 12 minutes' time. >> what is this magazine of which you speak sp. >> sports illustrated, swimsuit 2016 and we've been told in every -- >> it has been advertised, hasn't it? >> a little bit of excitement there. some excitement in the markets too where the dow is up 200 points on the session. we had relief in overnight sessions in asia and europe. s&p up 26 points and nasdaq up

88. the argument over whether or not the u.s. is facing recession does continue but bob kaiser says as long as we avoid the r word, there are a few sectors that he finds attractive in the equity market and he'll talk about it after we come back. i'm in vests and as a vested investor in vests, i invest with e*trade, where investors can investigate and invest in vests... or not in vests. this is my retirement. retiring retired tires. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement

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eight minutes left in the trading session here. why do we have these silly grins on our face right now? >> rick springfield in a photo-op with the swimsuit models. >> bob kaiser joins us right now. two-day bounce here and i know some of the traders are pointing to the revision in retail sales figures that came out friday. i know you agree with that, don't you? >> we saw the retail sales number as a huge sigh of relief, not only did it come in better than expected but they revised the prior month higher for that to be an impressive number and that came on the heels of the disappointing employment report and the growth scare after the jobs report got scarier and retail sales report was a sigh of relief for the marketplace.

how can you have a recession when retail sales hit a market. >> we heard mark okada saying people are rotating from growth and buying value. what do you recommend? >> if you believe that we're just going through a growth scare and we're not going to see a recession any time in 2016 or 2017, you have to buy into the cycle cals and financials and consumer discretionary and they are doing better the last two days than the s&p 500 index. >> we keep hearing go with the dividend players. isn't that a crowded trade? >> if we're going to see a resurgence, you have to worry about the dividend. because the ten-year treasury yield at is 1.75. they will be correlated with interest rates. it bears watching because you don't want to see a lot of talk about the fed all of a sudden

the fed has to do something, you have the 10-year treasury, 1.77 it's something to keep your eye on. >> you're saying the risk now is almost a speed back up square, something that brings it back into the picture. >> we're looking at the big picture, crude oil is a barometer for default risk in the economy. that's an old trade. the industrial production has been declining since mid-year 2014. as long as if the consumer picture can start to get rosier, we get more worried about the fed and where interest rates are. >> always good to see you. >> thank you so much. >> apparently they are offering photo opportunities over there. >> i'll get in line. >> like get your picture taken with santa claus or something. >> or something. >> we'll come back with the closing countdown. >> we'll wrap up today's market action and here from president obama, a late day press conference should begin at 4:30 p.m. eastern. we expect him maybe to remark about the supreme court. you're watching cnbc, first in

business worldwide.

i am benedict arnold, the infamous traitor. and i know a thing or two about trading.

so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle. and it keeps my investments fully mobile... even when i'm on the move... ahhh. group getting ready to ringle closing bell, annual tradition on the day that of the swimsuit edition of quts sports illustrated comes out. some of the young ladies -- today it's three, there were four here this morning. a lot of people line up to get pictures taken with these young ladies, but i would point out

these young ladies lined up to get their picture taken with bob pisani. >> they were out early on. big move, three this year for the cover. moving on. >> a lot of trepidation with a couple minutes left, about what the chinese market would do opening after a week-long break during the new year holiday. there was no need for the trepidation, not a bad gain, 3% overnight here. now back to 2800. so our market today continued its rally from friday. the dow jones industrial average was up more than 200 points and up 214 right now and does it without the oil market today, wti crude after an early rally now down 1%, we're at $29 a barrel. the cuttone includes the small caps, leading the way here

today. >> best two-day rally since august of last year. august of last year. here's what impressed me. let's do this tomorrow. we haven't had a three-day rally since the end of december. we have had no three-day rallies at all in the s&p. at least things are changing a little bit, partly on china and partly on oil and ecb and deutsch bank and march row draghi making comments over the weekend. a lot is still talk but high level talk, even with the oil thing. by the way, heavily shorted names, your freeport mcm pooran chesapeake energy, you'll see a lot of these names up double digit. a little bit was people covering their position. good start but let's see it put together. remember, every time we've had a two-day rally this year this falls apart. heavy selling still there. let's see if the selling is

exhausted for the time being. >> thank you, bob. >> i'm going to go now. >> young ladies ringing the closing bell for the new york stock exchange. arlz pharmaceuticals ringing the bell. kelly, i'll see you tomorrow. [ bell ringing ] >> i'm kelly evans, let's talk about the markets, here's how we're finishing up, dow adding 218 points and nasdaq getting 98 points. good for a rally of more than 2.25%, closing at 4435. best two-day gain since august. we have mike santoli here and kayla. and guy adami tip toes into the fray as well. thank you.

mike, just overnight there was some relief as china has come back online since the last time we were here on friday, talked up the currency a little bit. oil was higher but then lower. did that all contribute? >> we had europe and japan very strong while the markets were closed here yesterday. they are an extension of friday's rally. mostly it measures just how kind of stretched and oversold and how negative sentiment god. i guess you give a few extra points for the oil market being up but my read on that, when oil has put some distance between itself and recent lows, 8 or 10% believe it or not since last thursday. then it's okay if it backs off. so the credit market held together and allowed stocks to rally. >> we were talking about apple today and whether you could get the huge bond offering, no real reason to think they wouldn't. apple being apple. perhaps a good sent.

indicator. >> the 10-year being at 1.5 last week and now might be the right time and there are a lot of companies looking at this environment and it might be a bullish sign. i don't know, mike, what do you think? do you think companies like apple looking at the bond market and saying why do i add more leverage to my balance sheet are saying the economy is healthy and this is a open tune is tick time? >> what apple is doing to itself. buying back stock it perceives as cheap. in theory, you can do that in aggregate it has been above the 10-year treasury yield for a while. in a sense the market as a whole can play that game. it's not that simple though. >> but it's interesting because it's a psychological thing bringing you into the conversation here. people are kind of hoping that home oerns might do the same. see interest rates fall and go now is the time for me to maybe get out there and buy the house i've been waiting on and it's

corporate america, are we going to look back at this corporate leveraging cycle and say why didn't we realize this was some sort of mistake? >> that's a great question. i don't know the answer to that, maybe we will. there's no really way to know. i will say that given the state of the bond market, why wouldn't you issue debt at these levels? i think apple is doing things absolutely right. i think a lot of companies will fall in line along the same lines. but one of the things, unintended consequences of fed is to allow companies to do things like this. some of them at the -- at the risk or not investing back in their companies and not reinvesting in their companies, that's my biggest concern. in terms of today's action, one of the bright spots of the oil closed lower was the fact that the ovx, they made a seven-year high early this morning but reversed and closed down 9 or 10%. although oil closed a little bit

lower, maybe that's a sign of capitu capitulation and maybe you have a short-term bond in the oil market. >> i was going to ask guy, we're not necessarily worried about the leverage cycle for a company like apple but to think about the conversation back in 2006, 2007 when there were all of these leveraged bailouts and purchasing a refinancing clip and people were worried about how much debt was outstanding and you think about the record years we've had and high yield market and people are just drooling over continually low rates. do you think we'll get to a similar point? maybe we're not there right now but in the next few years, we'll have the same conversations and same worries. >> i the answer to that question is, yes, i think we're going to have that same conversation, whether it's six months from now or three years from now, it's hard to say. i do think there is a credit concern out there and it's manifesting itself in a number

of different ways. since thursday at 2:30 in the afternoon, when that uae headline came out, the s&p rally and i want to say close to 90 handles give or take. >> to everyone -- so they know what you're referring to, thursday afternoon, right at the lows those comments from dow jones that uae was talking about production cuts. >> by the way that didn't happen but there was some kind of agreement -- >> to your point when the s&p was on its lows of the day, 1810, a relief rally in the back of that and jamie dimon announce he was buying jp morgan stock, good for him. that night, you had comments about deutsche bank stock out of i think mario draghi and folks in the eu. we've been off to the races since. i think the market sets up for move up to 1920, 1930 in the s&p, we'll see what happens when we get there.

i don't think deutsche banks problems have been solved by any stretch but the relief rally could continue next several of days. >> if you can take those three little strands of news and people are willing to discount every single one as decisive and the market is up 80 points in two and a half trading days that tells you we were prime for something like this and it could carry further. >> there seems to be healthy skepticism in the opec headlines because it depends on how much dunts they did get on board to freeze these production. it's not necessarily just russia and saudi arabia saying we're going to do this and everybody else jumps on board. it needs to be a broad coordination. >> absolutely, my point is just that the equity market didn't wait for conversation and didn't need an actual agreement. it needs crude, not to make new lows then it's free to do what it has to do to rebound a little bit off the oversold level.

>> we're going to dig in in just a moment but the issue coming out of china i find kind of fascinating, they had the biggest move against the dollar since 2005. just a couple of days ago this after they jaw boned about how this is just speculators driving it lower, there's no real problem with outflows, et cetera. i'm surprised that the market took that at the face value it did and i wonder if there's a risk there of that unwinding if the currency starts to move lower again. >> there is that risk but what i find interesting is that over the long weekend here, last week all of the talk was central bankers have lost credibility, they are impotent and can't do more. logical conclusion of what they can do and in three days they speak and do a couple of unexpected things and they are in control again. >> on that very point, let's talk about what we heard in terms of fed speak today. big banks helping to drive the big rally despite comments from neil cash, the dodd frank financial reform law did not go

far enough to address too big to fail banks and the fed may have to consider more transformational measures. >> i believe we must again this work now and give serious consideration to range of options, including breaking up the large banks into smaller less connected, less important entities and turning large banks into public utilities by forcing them to hold so much capital they virtually can't fail with regulation akin to that of a nuclear power plant. taxing leverage to reduce systemic risk wherever they lie. >> now tomorrow morning on squawk box, kashkari will be joining 6:30 a.m. eastern. what did r do you make of it? >> turning banks and utilities, i heard that before, that rhetoric has been out there before. banks are easy targets, wall street is clearly an easy target, not a lot of people out there stumping for wall street,

but i'll sell you this, in terms of wall street's role in 2008, 2009, i understand their role but there was, on the other side there was there were people that put their names on mortgages and signed as well. there was greed on both sides, both public and wall street were kplis it. i get going after wall street and banks and too big to fail and make sure they have enough capital so nothing like this ever happens again but in terms of systemic risk, the systemic risk he's talking about is being created in my opinion by the central banks that have one of their mandates is to eliminate systemic risk. we can talk about this for hours and i'm sure the people will think i'm nuts but i think you need to look forward to the central banks and their role over the last eight years before you point your finger at wall street and banks in general. >> at this point in hindsight we can generally agree that leverage was one of the main causes of financial crisis, if

not the main cause for the banks at least in the financial crisis in that more capital for the u.s. banks ultimately is a good thing as we're now comparing their balance sheets to europe. i think what people are having trouble with, it's particularly rich coming from kashkari who helped design the program that was supposed to help rescue the banks and because we've now started talking about the banks in the u.s. as being so much safer compared to the banks in the rest of the world, in europe and in china and ironically, they are much bigger than they were during the financial crisis. >> it is somewhat ironic. but it would be great if that leverage that we all sort of talk about went away. i don't think -- my view is leverage hasn't gone away, it's just been moved. now it sort of resides on the central bank's balance sheet. people will say there's no leverage to the central bank. they can do whatever they want. and there's a mod of truth to this. you talk about a $5 trillion

balance sheet from 70 to $80 billion of cash, they are levered from 75 to 80 to 1, the leverage has gone away in large part but hasn't gone away entirely, it's just been moved. my point again, easy to go after the banks and easy target but nothing is really been solved. i think we're just looking at the wrong thing in my opinion. >> what do you think? >> i think first of all he wanted to send that kind of message and make this gesture that as a new fed president he's going to be vigilant about the industry. but it struck me, he's kind of predicting the present or at least he's posing this better capitalized utility like banking industry, which is what we have right now. i don't know it's really that radical except for the size of the banks. you can't tell me our banking system is any more concentrated than any other major developed country. >> there will be more of this in the morning and beyond. after following footsteps who did a lot fill sofically to

think the fed wasn't acknowledging enough some of the monetary tightening going on, this speech was nothing like in that realm, not that we would expect it either. thanks for joining us. >> always a pleasure. >> there's more coming up with him next hour and the "fast money" crew at 5:00. he's famous for exposing accounting problems in chinese companies, so now he's launching a hedge fund. joining us next with where he's seeing concerns now. they've successfully predicted the presidential nominee, students from mock convention join us with their pick from 2016 republican candidate. and president obama set to deliver a news conference at 4:30 or thereabouts, we'll bring that to you live as soon as it begins. keep it here, you're watching cnbc, first in business worldwide.

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♪ no, you're not ♪ yogonna watch it! ♪tch it! ♪ ♪ we can't let you download on the goooooo! ♪ ♪ you'll just have to miss it!

♪ yeah, you'll just have to miss it! ♪ ♪ we can't let you download... uh, no thanks. i have x1 from xfinity so... don't fall for directv. xfinity lets you download your shows from anywhere. i used to like that song. we've got some earnings coming in. >> we have our eye on shares of fossil, the company beating expectations on its top and bottom line, quarterly numbers, earnings of $1.46 versus $1.30. revenue topping expectations at $993 million despite competition

in the watch smartphone space. shares up 11.5%. >> seema, there's your revenue beat. >> absolutely, a revenue beat for a company that was probably bun of the biggest victims of last year's rout in consumer names. it just bounced up to short of 40 and heavily shorted. it seems any whisper it's not getting worse at the company is going to be seized on by the market, at least for now. >> fossil up 11% after hours. noted short teller, carson block has become famous for publishing research reports that expose fraud, particularly focused on companies in china. now turning attention to europe and here now is the founder of research for muddy waters, carson, welcome to the show. >> thanks for having me. >> i just have to wonder, you're going after the chinese, they do not like that. look what they do to people in the country when they feel like they might be able to blame somebody for the market going

down. is that ever concerned you? >> when i started muddy waters, i was living in mainland china and pretty soon after starting the business, i decided i had to leave. i've had people show up at one of my other businesses, i used to own there, looking for me, they were apparently heavily tattooed, kind of gangsterish, so yeah, i would say china is a pretty hostile environment for short sellers. >> absolutely. at this moment, what are you shorting in china? >> we're not short anything now in china but we're always looking. china is to stock fraud as silicon valley is to technology. i like shorting stock fraud so we always pay attention to china, never leaves the radar. >> but europe is more in your cross hairs at the moment, why and where? >> it's not -- we're not really focused on any particular country in europe. what we noticed starting in 2014 we came across a few european

companies that had market caps, valuations and were obviously problematic, but we asked ourselves, these problems are so clear, what could we? what value could we add by talking about them to the market. the market must be aware of these obvious problems. it turns out the market wasn't. kind of sat there watching a couple of european companies collapse and stock prices and said to ourselves, you know what, investors in europe must not be asking many questions and must not be looking under really kind of even looking for obvious problems. so that's when we got interested in europe. so far, yeah, we think that thesis holds. >> we're showing a couple of companies there, correct me in i'm wrong, group casino, noble proof point all onvolkswagen? >> i really wish i had had the

inclination to test the dees sells before that broke. normally something like that -- we're not normally looking at defective products, normally looking more at defective financials or financial engineering, but i don't have a few on volkswagen at this point. it's really tough. they are obviously going to have brands and trust issues to overcome. no view on how that goes. >> i wonder, is there anything structural about european markets and european business that makes it ripe for what you're talking hoop or is it simply that maybe there are just fewer people out there trying to expose individual situations? >> well, maybe there are cultural issues in the sense that it's really not proper to press management and force them to answer potentially embarrassing questions, that's one way of looking at it. another way of looking at it and i don't have a strong view here, but i do think european

investors tends to be more macro or theme attic tric attic drive. i think you're doing less analysis of the individual company. those are a couple of theorys as to why. >> also by the way, that's a place that even -- it's not china but also not the u.s. regulators.net like short sellers and that seems clear, the culture around it. carson, make the case as to why what you do is a public service if you would put it that way? >> well, what we do is, we catch companies -- really managements that are either being intellectually committing fraud, it might be legal what they are doing, but they are presenting misleading financials or actually are committing fraud. and in the process of outing these companies in these managers, it helps to clean up the environment. and we have seen that with chinese companies listed in the

u.s. i think they did get better after we and other short sellers really began holding them to account. >> i see our beefing up launching a hedge fund. want to tell us who gave us the 200 million bucks in the interest of full disclosure? >> they would not like me to do that. unfortunately no, but blue chip. >> what are your ambitions with it? >> i want to grow aum at a relatively modest pace. i believe in taking things somewhat slowly in the business. it afterall did take me over five years to launch a fund from when i started muddy waters and that was deliberate. so i think over the medium to long term we'll start doing long side activism as well as short side. and you know, i hope to have a nice little business some day as a long side and short side activist manager. >> i was wondering about that because it can be a pretty tough

strategy, especially on a large scale. has jim given you any advice? >> you know, what jim does is, it's kind of on the other end. he's got by far the most durable model in short biased investment management. he's got 70 to 80 names in his portfolio, everything is kind of a little slice. no one thing can below him up. we're more concentrated but we're also out there really pressing the management and trying to show investors what they should be looking at. so it's a different strategy. >> last question, carson. is there any place in the u.s. markets that are starting to get your interest where you're doing more work and there might be -- or even a specific name that you're ready to talk about? >> well, what i am interested in, i'm interested in companies that have credit ratings of triple b plus, just because

that's the bottom wrung of investment grade. and i suspect there are a lot of companies that are on that tier globally that really don't deserve to be investment grade. so that's from a screening perspective, that's an area where we're looking as well. >> interesting. come back and let us know what else you found. carson block of muddy waters. with this week's passing of justice antonin scalia, not republicans and democrats are fuming over whether it should or should not be fielded before or after the election. what the battle could mean for the cases on the 2016 docket? first, they haven't missed predicting the correct nominee and the mock convention with who the research says will clench the 2016 gop nomination when "closing bell" comes right back.

we head back out to seema with more. >> cheesecake fakry reporting a beat on the bottom line, 54 cents versus the 52 cents estimate. revenue missing expectations at $527 million. q4 restaurant sales coming higher up by 1.1%. favorable patterns in dairy and seafood costs helped results in the past. we'll have to see if that continues to be a trend in 2016

and casual dining, this industry has been in focus given the drop in gas prices, we're looking at shares falling after hours by 3.3%. >> we'll keep an eye on it. thank you toch. >> the washington mock convention is a student run organization has been held every four years since 1908 except war time. it has accurately predicted the presidential nomination 19 out of 25 times. lately the only it didn't is hillary clinton in 2008. who was chosen this year? let's ask the students right now. joining us, there he is, donald trump. a pair of students from my alma mater, andrew mccaffrey and kevin ortiz, thank you for joining us of the andrew, donald trump, really? >> that's where the numbers are

pointing right now. thanks for having us, we're excited to be here. >> and full disclosure, i was a freshman at w and l, part of the vermont organization only because that's what lacrosse captains told me to do. talk us through the process that resulted in him being the nominee. this is really surprising to people in some ways. >> sure, so mock convention is a entirely student run nonpartisan political project and been working for the better part of three years to accurately predict the presidential nominee for the party out of power in the white house. our project is divided into could categories, national research and regional and state level research. we have 56 state and territory delegations representing all 56 state and territories that can participate in the nomination process. we have students contact being folks on the ground and media and people in office in their various states and territories to see really what each state is

saying and kevin puts it together on the regional and national to come to final numbers. >> kevin, talk to us how this resulted in donald trump this year. for people who haven't experienced it, you walk into the gymnasium and it's like being on the floor of a convention. it's so exciting and it really you guys mimic what happens on a national level. tell us how trump wound up with 1320 votes here? >> it certainly was a phenomenal experience. for the national research team, how we approached it, currently looking at the numbers, mr. trump has the most likely path to victory. we foresee senator cruz as very much a regional candidate. he does very well in the south. the issue is the south has to allocate the delegates proporti proporti proportionally, we foresee cruz and mr. trump getting a large number of delegates in the south. then we move to march 15th when we can start using winner take off. we also foresee in the

quote/unquote establishment inside our lane, governor rubio and kasich and bush, foresee them still being in the race. and if we are, we see mr. trump going all the way through for that. >> this is kayla, you mentioned you do three years of research. trump's campaign is less than a year old. how does the process work throughout the course of those years? and how does it change course when you have new entrants who are he especially this year not political insiders? >> sure, so our three-year process is kind of rebuilding our starting up of a company. mac convention proper has 120 students involved. once you get to the state delegations, we involve 1600 people on campuses here. the initial part of those three years is focused on building the company and getting funding, we're not directly funded by washington and lee. we're getting the word out and get being a media platform and

working on political research a year and a half out. mr. trump's entry into the race was up ending. if you look at the cycle, it's been nontraditional and if we're going to really look at it newt gingrich was one of our speakers, called it utterly unpredictable. he tossed up the way mock has looked at the analysis. >> what if somebody decides to jump in from here, be it michael bloomberg perhaps? >> well, so much for the republican nomination, we don't foresee mr. bloomberg being as much as a factor. a lot of ballot deadlines have passed in several of the states. another candidate jumping in at this point for the republican nomination isn't so much a big issue. the issue comes if mr. bloomberg decides to run in the general election, potentially win the general election or play spoiler for either the democratic or republican parties. >> we have to go, gentlemen, but last word, andrew, are you

nervous? listen, hillary, that was a black eye and now donald trump, this is risky. >> you know, we're really confident. our political team put hundreds if not thousands of hours into this project on the state level and national level. we're really confident and like kevin said, if you look at the path to victory, it's not riddled quite by the contingencies that we see other candidates but looking at more convection as an organization, we're successful if we get the prediction right but get students and young people engaged in talking about the electoral process. we accomplished this this past weekend. >> well spoken, it must be such a great place. i think you have a future in politics. >> it certainly is. >> thanks for joining u. great event all weekend. and donald trump tweeting how impressed he was with the selection as well. >> let's get over to sharon. >> here's what's happening.

pope francis celebrated a mass in mexico as tens and thousands gathered at the local station. it is a hot bed of mexico's drug trade. the pope urged mexico's priest not to resign themselves to a country dominated by drug fueled violence and corruption. >> according to new guidance from the fda, anyone who has been supposed to the zika virus or travel to areas where zika is spreading should not donate blood for at least a month. there have been no reports of zika in the blood supply but experts say similar viruss have been known to be transmitted in blood. in a matter of seconds, a 67-year-old bridge came crashing down in oklahoma. the new kirk bridge was built in 1949. it had been deteriorating for years before being imploded. a new bridge parallel to the span opened last month. nfl commissioner roger goodell was paid $34 million, made public because the nfl has

non-profit status. in the nine years his salary has been disclosed, averaged $20 million a year in compensation. and that's the cnbc news update at this hour. >> thank you so much. there are four pending cases with business implications on the supreme court's docket this year. but with eight sitting justices after scalia's death, there's no fifth vote to break ties. how do this affect cases going forward? president obama set to deliver a news conference any minute now. we'll have it live when it starts "closing bell" is back in two. ohh ah ah aflac! aaaaf-lac! ta-daa! he's not a very good magician. he paid my claim in just one day. one day?! shh! how does he do it?

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welcome back, different picture on wall street than what we've seen so far for much of the year. dow was up 222 points and nasdaq was up 98. let's send it over to dominic chu. >> we're watching 13 f filings that major money holders have to disclose at the end of each quarter, berkshire hathaway announcing a new stake in kinder morgan, up 6% on nearly 1 million shares of volume in the

afterhours session, berkshire hathaway announced a new position, worth $400 million at today's closing price. the size indicates that it probably wouldn't be a warren buffett himself pick but perhaps one of his lieutenants there. still nonetheless, shares are moving to the upside. we should remind you, they are down 63% over the past 12 months. they are not the only ones in kinder morgan as well throughout the course of the f-13 filing season. we found david teper has a new share stake in kinder morgan and renaissance technologies boosted their share account as did citadel, it appears at the end of december, important to note, december 31st, 2015 filings they had either taken new stakes in kinder morgan or had boosted the existing share positions to a substantial amount. we'll continue to monitor this. the caveat here, the state is 45 days old shlgs we know it was a

volatile start to 2015. we'll see if they hold up to the next round of filings, over to you. >> as mentioned, shares up 7%. what do you make of it? >> it seems the value is down tremendously. it has nobody ever argued kinder morgan didn't have impressive infrastructure assets. i think it's a matter of what you pay for them and whether the company was structured properly in terms of payouts it was promising and a lot of these companies got overbought by people chasing yield -- it seems it's based on asset value. i i'm wondering if you think it's a departure from the refiners. think this an addition or departure from that. i would think it's about the value of the mid stream in general. berkshire hathaway as a whole have these pipeline like assets as well. i also think we have to keep in

mind, maybe it's not really coming straight from warren buffett's office saying i want to own this thing. >> a lot of activity in the pipe line space, whether that's the companies in a way, mike? >> i think it's a matter of when things get beaten up so bad, smart money thinks that they are smarter nan the market. i think honestly, i don't know if it takes much more than that to explain it. >> shares are roughly uncharveged but on the news of those investments after hours up more than 6%. we're moments away from president obama's news conference, from asean in palm springs california. john harwood joins us with a preview. >> president obama intended to go to the conference and talk about the trans pacific partnership and the ties across the region which he's trying to

get the united states congress to approve the deal, also some military conflict in the south china sea, china is making claims that conflict with our asean partners but this news conference will be completely overshadowed by the vacancy on the supreme court left by the sudden and shocking death of antonin scalia. the president has vowed to appoint somebody in due time, not too long. and mitch mcconnell, senate republican leader has vowed he's not going to approve, let the senate approve any obama nominee. we'll see how that standoff works out over time as democrats try to put pressure on but we did hear from the senate judiciary committee chuck grassley and the president will be asked about this today, he will hold hearings on a presidential nominee. it is not for ordain the outcome of the standoff but that's what

i would expect the president to address when he comes out in a few minutes. >> i understand that he could make a recess appointment, something the supreme court itself has nar rowed the president's berth on in the last couple of years, but would put somebody in that seat for a couple of years. how likely is that? >> that's extremely unlikely. the white house has said the president would not do that. that is a provocative kind of move for a president to make and it would not be really fair to the nominee because you -- for a lifetime job what the supreme court is supposed to be, you would have somebody appointed for a short period of time. i would not expect the president to take that route. >> how legitimate is for him to say he shouldn't fill the seat because it's the final part of his term? >> that's his constitutional responsibility and he said he's going to fulfill it. it is however the senate's decision as to whether they affirm that nominee. and so mitch mcconnell in saying that the senate would not move

forward is within his constitutional authority as well. so the political standoff is when these two imperatives collide and who is going to get public opinion on their side to get them to carry the day? the democrats are counting on an rg. that republicans would be holding up the proper functioning of the government and doing it for idealogical reasons and they are going to try to especially with those swing state republican senators get them to get mitch mcconnell to back off. we don't know how that's going to work out. >> one name that's appearing on top of the list, is sri, the same judge mentioned in relation to the net neutrality cases? he seems like the guy who is previously the one who -- the whole in a way the whole telecom industry was watching which way he would go in this stuff? >> i don't know about that. i do know he was affirmed by a

name vote of the united states senate so was jane kelly, on another appeals court who is in iowan and strongly backed by chuck grassley, when she was appointed to the court. if you put forward a name that's been unanimously confirmed, no republican confirmation in the senate, that makes it you haver for republicans to say no. >> is there any precedent for someone being nominated in front of the senate and having certain republican senators or democratic senators changing their tact? >> sure. we've seen this before. people affirm at one level of the federal bench not being delayed or blocked for a different level of the federal bench. and of course we've had controversy about supreme court appointments in the past and it's hardly unprecedented for a supreme court nominee to be

defeated or withdrawn before confirmation. so there would be nothing ground breaking about that in terms of republican opposition. >> i wonder in terms of bearing on the republican nominating race right now, do you think there's a chance that it could be a potential weakness for donald trump in terms of the litmus test you might apply for the kind of nominee he might put out there. all of these various requirements that the base might want of a republican president? >> you know what, bob, donald trump has shattered every republican litmus test. all of the boundaries that we thought were hindering or con straining republican candidates, when he went out and said george w. bush lied to get us into war and was negligent before 9/11, those are the kinds of things you never hear republican candidates say. in this case of a supreme court nomination, i don't think that's going to hurt him. i do think the existence of this issue is a boost to ted cruz

because ted cruz is a supreme court litigator himself and will cast himself as the scalia in the republican race and therefore the most fluent on these issues and the one most equipped to lead the republican or conservative battle on this issue. >> i've heard some sort of joke that might be he should have that seat if that's what is so interesting to him. >> i don't think he wants it. >> real quick. there are key business cases the supreme court has got to hear. one about california unions could have wide-ranging implications. what happens now? >> if the court is deadlocked 4-4, that means they simply affirm the lower court ruling, which in the case of public employee unions is favorable to the liberal side. there are other cases affirming a lower court ruling to block the president's climate plan which would be more favorable to the conservative side. it would punt and await a future court when it is at full strength and can decide these

cases that have precedentshal value. we might hear more from the president when he begins speaking from the asean summit shortly. we'll bring that to you as soon as it happens live right after this break. i've got a fantastic deal for you- gold! with the right pool of investors, there's a lot of money to be made. but first, investors must ask the right questions and use the smartcheck challenge to make the right decisions. you're not even registered; i'm done with you! i can...i can... savvy investors check their financial pro's background by visiting smartcheck.gov

welcome back, we have a news alert on apple. >> this is coming by the sec regulatory filings, carl icon has disclosed they have cut

their stake in apple by around 7 million shares to around 45.7 million total shares. again, the big caveat, as of december 31st, 2015. carl apple by about 7 million total shares. he now has around 45.7 million shares as a result. apple shares down about a third of a percent in the after market session. on a year-to-date basis the stock has been a relative market performer, down about 8%. however, over the course of the past 12 months the shares have erased about a quarter of their value. again, apple certainly a battleground stock for a lot of investors, very widely held flame. in this name carl icahn, the activist investor disclosing as of the end of last year they have reduced their stake in the company by about 7 million shares and, of course, kelly, this is all on today carl icahn's 80th birthday. back over to you guys. >> dom, how many shares did you say this leaves him with? >> about 35.7 million shares as

a result of this reduction as of december 31st, 2015. >> thanks, dom. >> okay. >> i ask because it's important to know whether this is a repudiation of his apple thesis or trimming of the stake. what do you think? >> also a good reminder to everybody that he started buying in mid-2013 when split adjusted the stock was in the 50s and 60s range so he made quite a bit of money on this stake throughout years at this point though anybody who has notched those types of gains is probably going to pair back a little bit. >> on the other hand, he famously put out a fair value estimate of i think $240 for apple. he said it was a no-brainer, as long as they did what he said which is buy back a ton of stock which is exactly what happenle has done. clearly the thesis on apple hasn't worked out that well, either on a fundamental basis yet in the last year or so or on that financial engineering side. >> mike, as you mentioned, they bought back $110 billion worth of shares out of $140 billion planned. they made a lot of financial engineering moves that basically the carl icahns of the world wanted them to make.

what do they have to show for it? >> it's a counterfactual. where would the stock be if they had not been a big source of demand. >> hate to break in. president obama beginning to speak out there at the asean summit. we'll listen in. >> beautiful sunnylands and the peoplech rancho mirage for their incredible hospitality for the past few daysches i've hosted foreign leaders here before. it's quite another to host leaders from ten nations at the same time, and i want to thank everybody who made the summit such a success. >> for 50 years, leaders and people across southeast asia have worked together through asean to advance their future security, prosperity and dignity. for decades the united states has been a proud partner with asean, and this summit has built on the unprecedented cooperation we forged over the past seven years, as i described yesterday. this spirit working together on

behalf of mutual interests and mutual respect guided our work over the past two days, and so i especially want to thank my fellow leaders from the asean countries for being here, for their commitment and for the progress that we've made together. one of my main messages over the past two days has been the commitment of the united states to asean and its people. that commitment is and will remain strong and enduring. with our strategic partnership we have a framework to guide our objectives in the years to come. asean will be central, in fact indispensable to peace, the pro parrot and progress in the asia-pacific. when asean speaks with a clear unified voice, it can help advance security, opportunity and human dignity. not only for the more than 600 million people across asean but for people across the

asia-pacific and around the world, and i'm pleased that here at this summit asean's strong voice allowed us to make progress on multiple fronts. first, we agreed to do more together to encourage the entrepreneurship and the innovation that are at the heart of modern competitive economies. we have an excellent discussion with a number of pioneering business leaders who reiterated the recipe for attracting trade and investment. rule of law, transparency, protection of intellectual property, efficient customs, modern infrastructure, e-commerce and the free throw of information and support for small and medium-sized businesses and perhaps most importantly investment in people, investment in strong schools to educate and train the next generation. around the table there was widespread recognition that this is the path asean countries need to continue on. as they do, they will create even more opportunities for trade and investment between the u.s. and asean countries.

i affirmed our strong support for the asean community and pledged that the united states will continue to be a partner in asean's efforts to integrate economies and reduce barriers to trade and investment. i'm also announcing a new initiative, u.s. asean connect, a network of hubs across the region to better coordinate our economic engagement and connect more of our entrepreneurs, investors and businesses with each other. we're also doing more to help aspiring innovators in the region learn english, the international language of birks and i reiterated that the transpacific partnership, which includes four asean members can advance economic integration across asean and set stronger rules for trade throughout the asia-pacific. to that end, we've launched a new effort to help all asean countries understand the key elements of tpp as well as the reforms that could eventually lead to them joining.

second. with regard to security, the united states and asean are reaffirming our strong commitment to a regional order where international rules and norms and the rights of all nations, large and small, are upheld. we discussed the need for tangible steps in the south china sea to lower tensions, including a halt to further reclamation, new construction and militarization and freedom of navigation must be upheld and lawful commerce should not be impeded. i reiterated that the united states will continue to fly, sail and operate wherever international law allows, and we will support the right of all countries to do the same. we will continue to help our allies and partners strength then their maritime capabilities and we discussed how any disputes between claimants in the region must be resolved peacefully through legal means such as the upcoming arbitration ruling under the u.n. convention

of the law of the sees which the parties are obligated to represident clinton is and abide by. third, i made it clear that the united states will continue to stand with those across southeast asia who are working to advance school of law, good governance, accountable institutions and the universal human rights of all people. we continue to encourage a return to civilian rule in thailand. we will sustain our engagement with the people of myanmar as the new president is selected and as they work to implement the cease-fire agreement and move forward with national reconciliation. across the region we'll continue to stand with civil society and defend their freedom of speech and assembly and of the press. no one, including those in political opposition, should ever be detained or imprisoned simply for speaking their mind. that only stymies progress. only makes it harder for countries to truly thrive and prosper. and finally, the united states and asean are doing more to deal with transnational challenges

together. i offered our assistance to help asean countries better leverage interpol data to prevent the flow of foreign terrorist fighters. we agree that implementing the paris climate change agreement, including helping developing countries adapt to and mitigate the impacts of climate change will be critical, and it will enable them to leap ahead to new and affordable clean energy. as we pursue our sustainable development goals we're launching a new competition, an innovation challenge to encourage students across asean to develop new solutions to boost agriculture. we're moving ahead with our global health security agenda to prevent future epidemics, and i pledged additional u.s. assistance to help asean combat the horror of human trafficking. so to sum up, i believe the summit has put the u.s. asean partnership on a new trajectory that will carry us to even greater heights in the decades ahead. america's foreign policy rebalanced to the asia-pacific,

including southeast asia, will continue to be a foreign policy priority of my presidency. i look forward to visiting vietnam for the first time in may and to becoming the first u.s. president to visit laos when it hosts the east asia summit in september. and i'm confident that whoever the next president may be will build on the foundation that we've laid because there's strong, sustained bipartisan support for american engagement in the asia-pacific region. and through our young southeast asian leaders initiative our investment in young people, in their business success and civil society and grooths leaders across the region i believe will further bind us together in a spirit of partnership and friendship for many years to come. so with that, let me take a few questions, and i'm going to start with darlene superville of the associated press. where's darlene? there she. >> thank you, mr. president. my question is about the supreme

court. >> i'm shocked. >> what recourse do you have if leader mcconnell blocks a vote on your supreme court nominee, and do you think that if you choose someone moderate enough that republicans might change course and schedule a vote, and as can you consider that choice and who to nominate what qualities are important to you, and is diversity among them? >> thank you. . >> first of all, i want to reiterate heartfelt condolences to the scalia family. obviously justice scalia and i had different political orientations and probably would have disagreed on the outcome of certain cases, but there's no doubt that he was a giant on the supreme court, helped to shape the legal landscape. he was by all accounts